Avoiding The Pitfalls
Unfortunately, even the best planning can fail to protect you from the many surprises and
obstacles that can materialize in the course of the home buying process. Often the
difficulties that complicate the process are a direct result of the human element brought
to the table by the buyers and the sellers. Other problems occur because of the failures
or mistakes made by the lenders or other service providers involved in the real estate
transaction. And finally, there are those acts of nature that are unexpected and usually
unavoidable, such as severe storms, fire, and earthquakes which can foil any good plan.
The Human Factor:
Many times, the most difficult problems originate from the people involved in the actual
sale of the house because home buying and selling is so often laced with emotions. There
is frequently tension between the buyer and seller from the outset of the transaction,
prompted in part because each enters the negotiations fearing that the other side will get
the better part of the deal. There is also the opportunity for unbridled dissension to
grow within the parties who are either buying or selling (especially when spouses and
children enter the picture) as they attempt to agree on the endless decisions that
accompany the purchase or sale of their home.
Short of hiring a personal psychologist (or a bodyguard) to guide you through the process,
there are some situations you can guard against given the right attitude and planning:
Unless you are dealing with a third party seller, meaning the party has been hired to act
on the seller's behalf, expect that the seller will have some level of attachment to the
property, probably at an emotional and very personal level. Be sensitive when you walk
through the property with the seller in tow. This is not the appropriate time to critique
the color of the furniture or comment on how much better the property will look once in
your loving hands. Talk of extensive remodeling ("Once we rip out the kitchen,
relocate the family room, and put wall-to-wall carpet over the hardwood floors we can
begin to call this 'home') can make even the most committed sellers reconsider.
Rule: Insist that you be allowed to preview the property without the
seller in attendance. That should give you room to visually remodel without offending the
Keep an eye out for the other emotional party to the sale...you! No matter how logical and
analytical you try to be in purchasing a home, it is likely that by the time you make your
first offer, you and whoever you might have as a partner, will have begun to make an
emotional investment in the property. The furniture will begin to fit in all the right
places, your children will be moving their swing set under the big oak in the back yard,
the basement will be on its way to being the workshop, and most importantly, you will know
that the search is over. As the dates for the closing are finalized, so is your commitment
to making this work no matter what. In this weakened condition, you are vulnerable to
making mistakes that could cost you dearly in the long run.
Rule: Try to remember that you can walk away if the terms are not right
for you. There are plenty of homes out there, even if none seem so special at the moment
as this one.
Shopping for Bargains:
It is easy to become something of an expert on accurate home pricing if you look at enough
properties. Once you have developed a feel for the market, you will be able to spot a
bargain as well as an overpriced listing. If you find a bargain, assume you are not the
only one with such incredible insight and act quickly! This is not the time to negotiate
for the last penny or construct an offer that is laden with conditions. If the seller has
priced the property to sell quickly, then you can trust that you will not be the only one
to line up with an offer. Some sellers know as much about pricing as you do and will only
accept an offer that is within a narrow range. Heartbreak often follows those who enter
into negotiations on an aggressively priced property, and then try to take advantage of
the seller's apparent eagerness to sell by trying to push a little too far.
Rule: If you find a "bargain" property, respond with a worty
offer unless you can afford to lose the property to another bidder.
Dealing With Over-Priced Listings:
That same expertise that qualifies you to jump on the bargains will also lead you to
identify the properties that are grossly overpriced. Why are listings overpriced? Usually,
the seller is simply unwilling to consider a value for their property that is below their
self-imposed range. Most buyers will avoid these properties like the plague, since the
apparent message being sent by the seller is that they are unreasonable people (why else
would someone allow their property sit idle on the market months longer than similar
properties without a single offer or price reduction?) And yet, in spite of your best
efforts you could find yourself falling in love with an over-priced listing.
There is nothing more frustrating that finding the home of your dreams grossly overpriced,
and being unable to coax the sellers into considering a more reasonable price structure!
If you do locate such a property, be prepared to negotiate artfully and aggressively to
bring the price into line. This is a situation where an accomplished Buyer's Agent can be
of great value, since it is likely that a successful negotiation will come only at the
expense of the seller finally admitting that their initial price was out of line. A third
party negotiator helps keep the emotions of the buyer separated from the ego of the
seller. Even with the aid of a third party negotiator, it is likely that there will be
several rounds of negotiations encompassing many days (even weeks) of offers, discussions,
and counter offers. Over-priced listings require patience and perseverance.
RULE: If you must present an offer on an over-priced listing, do so
through a third party, or be willing to wait patiently while the seller slowly adjusts to
a more reasonable pricing level.
Buying With Urgency:
Having time on your side is one of the best methods for assuring that you will be
satisfied with your eventual home purchase. Unfortunately, many buyers find themselves
forced into deciding to buy a property primarily because they are out of time. Perhaps
their spouse is arriving with the kids in three weeks, or they have to be settled to begin
a new job, or they have to move out of the house they are selling and don't want to live
in interim housing. The most common urgency situation is created when the buyer is
relocating and plans the single trip to the new area to locate the property. Within the
weekend the house must be found and put under contract, and financing must be applied for.
The situations that create urgency are too many to count. But the end result is often the
same. The buyer has to act aggressively in order to secure a property, which ultimately
means that the buyer is likely to pay too much.
RULE: If price is important to you, try to arrange your circumstances so
that you are not buying with urgency. Set aside ample time to look at houses and make your
decision. You will find that you are in a far better negotiating situation when you do
find the perfect house.
The preceding tips will help guide you to a more comfortable and painless purchase
process. By anticipating what could go wrong and being prepared to cope with surprises
with a positive attitude, you will have a far better chance of reaching your end goal of
buying the home.
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